Whether it be a leisurely stroll or a steady sprint, you're sure to find a race to match your pace or purpose. Austin hosts a variety of races throughout the year, several of which are for charity organizations.
Information about races can be found at www.runtex.com
Here is a precursor to Residential Stratigies' review of the first quarter 09 numbers for Austin. It is actually pretty good... compared to the rest of the world. Austin added jobs, reduced inventory and is below or at equilibrium (6 month supply) even with lower demand due to the disasters in the economy. Pretty amazing really!
New home starts continued their decline in the Austin area for 1Q09 according to the latest
market census prepared by Residential Strategies, Inc. Builders started 1,215 homes for the
quarter, a decrease of 280 units from 4Q08, and down 47% (-1,082 units) from 1Q08. The annual
start rate has now fallen to 7,938 units. At the market peak in 3Q06, Austin produced 17,128
annual starts.
Closings also fell for the quarter to 2,145 units. In 4Q08 builders closed 2,305 houses, and in
1Q08 3,120 units were closed. The annual closing rate now stands at 9,984 units (2,046 units
higher than the annual start rate). "While many may see the lower start rate as a negative
situation in Austin, it should be pointed out that builders entered 2009 with more finished
inventory than they wanted" says Austin partner, Mark Sprague. "The consumer was pounded
with negative news in 4Q08-a declining stock market, credit crisis and revelation of the depth of
the current recession-and because of this, confidence was eroded. As a result, most builders had
higher cancellation rates on previous orders than was normal at the end of 2008. The good news
is that builders have cut back on starts and focused on selling this inventory in the First Quarter,
2009."
Total housing inventory declined by 930 units in 1Q09, dropping from 5,375 units to just 4,445
units (a decline of 17%). In aggregate, this inventory represents just a 5.3 month supply of
inventory, where a 6.0 month supply is considered equilibrium. "The number of finished vacant
homes has declined from a peak of 2,947 in 1Q08 to just 2,133 today. Builders and lenders are
reluctant to start speculative homes and are focused on managing their housing inventory" notes
Sprague.
Another noticeable trend is that builders have abandoned unprofitable locations. In 2Q08 there
were 605 model homes in the Austin area. At the end of 1Q09, there were 536 homes, a
reduction of 11%.
The vacant lot supply was reduced by 307 lots for the quarter to 30,984. However, with the
decline in the start rate, this lot inventory now represents a 46.8 month supply, where a 24 month
supply is considered equilibrium. "The over-supply of lots is deceiving" says Sprague. "There
are parts of the Austin market, especially in closer-in areas, that will face a shortage of lots in the
not too distant future. Conversely, some of the outer-ring areas, and areas that catered to the
subprime markets may take longer to recover."
Despite the continued challenging housing market, mortgage rates have recently dropped to a 52-
year low. According to Bankrate.com, the 30-year fixed rate mortgage at 5.19% is the lowest rate
This great info was shared with us by Tera Gilbert of Wells Fargo Mortgage.
Great Rates + Declining Values = No Refi for You. Maybe Not. While interest rates have been at levels not seen in generations, not everyone has been able to benefit. As home values have come down across the country millions of homeowners have been unable to refinance.
When applying for a home loan, one key component in underwriting is the amount of equity or down payment in the transaction. As home values have declined, even in some cases where someone put a sizable down payment into the purchase of their home, refinancing to achieve a lower payment has been unfeasible.
In details of the Housing Affordability and Stability Plan released this week, four to five million responsible homeowners have been targeted to obtain assistance in lowering their payments. People who now have less than 20% equity in their home have experienced difficulty in achieving lower payments by refinancing. Homeowners with loans that are owned by Fannie Mae and Freddie Mac may now be able to refinance into a lower interest fixed rate. This will also apply to homeowners with an adjustable rate (ARM).
One caveat will be that the new loan amount will be capped at 105% of the value of the home. As many will seek to include their closing costs in the loan amount, this will need to be factored in when considering this as an option.
To pre-qualify for the Making Home Affordable refinance, you must be able to answer "yes" to each of the following four questions.
1. Is your home your primary residence?
2. Do you have a Fannie Mae or Freddie Mac loan?
3. Are you current on your mortgage payments? Current, in this case, means not having been more than 30 days late in the last 12 months.
4. Do you believe the amount you owe on your first mortgage is the same or less than the current value of your home?
To determine who owns your loan, call your servicing company and ask. If you have difficulty reaching them, you can also contact Fannie Mae at 800-7FANNIE or Freddie Mac at 800-FREDDIE between the hours of 8am and 8pm EST. You can also click the following links and request the information online.
Other issues may exist for you in getting this loan. If you currently have a second mortgage or Home Equity Line of Credit (HELOC), the lender will need to re-subordinate their loan to the new first mortgage. Not all second lien holders have been willing to do this.
One other question will involve Private Mortgage Insurance (PMI). Will PMI be required on these new loans as it is required on all other agency loans when the loan-to-value exceeds 80% of the appraised value?
While a new appraisal will not be required, the parameters for determining the value used in the transaction are being delivered to loan servicing companies and additional information can be supplied by your servicer.
What if I Still Can't Refinance? The final part of the HASP legislation involves assisting homeowners that will not be able to refinance but are still experiencing financial difficulty. For these borrowers, a loan modification may be warranted and it is expected that 3 to 4 million people may be able to get assistance.
Making Home Affordable modifications are intended for people that can no longer afford their monthly loan payments but still desire to remain in their home. In order to qualify, the affordability of your payment must have been impacted by a hardship.
A hardship that may qualify for modification could include, but not be limited to, a change in your interest rate, decreased income, or increased expenses related to issues like medical expenses, increased property taxes and/or hazard insurance.
To qualify for a modification under the terms of the plan, you must be able to answer yes to the following questions:
1. Is your home your primary residence?
2. Is the amount you owe on your first mortgage equal or less than $729,750?
3. Are you having trouble paying your mortgage? Reference above for examples.
4. Did you obtain your mortgage before January 1, 2009?
One item to note is that the program is not available for jumbo loans. In many areas of the country, a jumbo loan is any loan amount between $417,000 and $729,750. Areas of the country where the loan amounts exceed $417,000 and are still considered eligible include high cost areas like parts of California, Florida, Washington DC, and the Northeast. Your servicing company can provide greater eligibility details.
Loan modifications included in the program are designed to assist the homeowner reach a new mortgage payment, inclusive of principal, interest, property taxes, insurance and homeowner's association fees of not more than 31% of gross monthly income. In order to arrive at this number, participation from both the lender and the government may be involved.
What's Needed to Qualify for Either Program? In order to qualify for either option, the homeowner needs to know that full qualification will be needed to ensure the borrower can meet the new payment. This will include supplying full income documentation and disclosure of assets. They will also be required to provide documentation proving the property is a primary residence. This can include verification through a credit report or other documentation such as utility bills.
To qualify for the modification program, evidence of additional housing expense items will be required including any other loans like cars, credit cards and student loans and their minimum payments, regular household expenses and a hardship letter detailing your situation and inability to make your payment.
Finally, all lender and loan servicers' participation is voluntary in either situation. Just because the programs are now available does not guarantee you will be able to find relief. Not all people in distressed situations will be helped. In these cases, there is a website detailing additional options that can be found at FinancialStability.gov.
Final Recommendation The details of the legislation released this week may not assist everyone in need of relief. However, if the bill does what is expected, it could assist in lowering the mortgage payments or save people from foreclosure at the rate of 7 to 9 million homeowners. While the final impact on the economy may not be known for years, the first step is to find out if it will work for you.
For the fourth straight year, Texas is the top state Americans are moving to, according to Allied Van Lines, which annually tracks US migration patterns. Texas had the highest net relocation gain (inbound moves minus outbound moves performed by Allied Van Lines) of 1,903 in 2008.
"With the continued job growth we're seeing in major cities like Dallas and Houston, and very affordable home prices statewide, Texas is still the place to be," says Brooke Hunt, 2009 chairman of the Texas Association of Realtors (TAR).
Texas' 9,879 total Allied shipments (inbound and outbound moves) in 2008 ranked second behind California, which had 11,400. But more people moved out of California last year, enabling Texas to retain its status as the number one "moving-to" state in the country. In fact, according to new data from the US Census Bureau, Texas gained more residents between July 2007 and July 2008 than any other state. Texas gained 484,000 residents during the 12-month period, followed by California (379,000), North Carolina (181,000), and Georgia (162,000).
Sources: Allied Van Lines, US Census Bureau, Texas Association of Realtors
Now is the time to buy! There are more homes on the market in the Austin area than ever before and interest rates are at a near 45 year low. I just got quoted 4.75% from my lender!
Austin has avoided the spiraling downward of real estate values due to our projected job growth and low unemployment rates and all signs say it will stay that way. All the financial guru's say that you make your money when you buy your new home, not when you sell. That means, buying in a buyer's market ... today! As a buyer, you can't perfectly time the market - no one can. But, the smart buyers purchase during what the industry calls the "safe zone", meaning a strong buyer's market which we are currently in.
When thinking about a move, you also need to take into account the affect it will have on your quality of life, not just your bank account. Will your children be able to enroll in better schools? Will you save on gas and cut your commute by being closer to work? Will you have less stress because you will have a smaller home to clean and maintain or will your family no longer be living on top of each other because you will have more room to spread out?
Each of these factors has an emotional cost and benefit every bit as important as the financial benefits of owning the home that is right for you!
Census bureau shows Texas economy attracting droves
More people are moving to Texas from other states than from other countries as the state's relatively strong employment base attracts families struggling with foreclosures and layoffs elsewhere, the Census Bureau reported in late December.
Between July 2007 and July 1, 2008, nearly 141,000 people moved to Texas from other states, compared with about 92,000 international migrants, the bureau said.
The data provide a fresh indicator of how longstanding immigration patterns into Texas are changing.
In the early years of this decade, international migration into Texas was two to three times as great as domestic, but the trend reversed starting in 2006.
Much of Texas' international migration historically hails from Mexico and Central America, where immigrants fled poor conditions. But the surging domestic migration into the Lone Star State is now likely to come from economically depressed states such as Michigan, which lost about 46,000 residents between July 2007 and July 1, 2008.
Texas gained 484,000 residents last year, more than any other state. In percentage growth, Texas' 2 percent tied for third with North Carolina and Colorado behind Utah, 2.5 percent, and Arizona, 2.3 percent.
Karl Eschbach, the state demographer, said Texas has continued to produce jobs while employment declined in many other states. He said this was the key factor driving the increased domestic migration.
"For the past several years, job growth in the United States means Texas," Eschbach said. "The Texas economy has so much outperformed the rest of the country."
While the mortgage market continues to generate a lot of chatter in both the media and in Washington, interest rates are currently near or at all-time lows. If you or anyone you know are looking to take advantage of these low rates, let me explain why now is the time to act.
Lately there has been talk about the 4.5% 30-year fixed rate mortgage. Will it become a reality though? Right now, no one really knows. Homeowners who could benefit from a lower interest rate need to know that even if 4.5% becomes a reality from Washington's actions, it would only be available to home buyers, not homeowners seeking to better their rate. If you need to refinance, you will be left out.
You also may have heard about Hope for Homeowners, which is a program approved by legislators to help distressed homeowners. However, regardless of its best intentions, the program has not been embraced by investors, and it is not available to many it could help.
The bottom line is, the Fed announced recently that they are going to buy up to $600 billion in mortgage-backed securities. This has already driven rates to historical lows. In January, the SEC is meeting and information may be released that could have a significant bearing on rates, potentially for the worse.
Waiting to obtain the best rate is only possible for those with loan applications already in process. Interest rates are incredibly volatile and fluctuations that used to take months are now occurring in just days or even hours. If you don't have an application in process, you could lose out.
We are already seeing lender backlog due to low interest rates. In 2003, with rates at these same low levels, we saw some lenders taking up to 90 days to close a loan.
Home loan rates are currently in the mid- to low-5% range. Home values are currently at 2003-2004 levels, coming down significantly from their high point. If you or friends and family members are contemplating seeking financing, now is the time to act.
With a first time home buyer tax credit of up to $7,500 and low or no money down programs available for many people today, now is a great time to buy a home.
For the second year in a row, REALTORS® report that exterior remodeling projects return the most money as a percentage of cost, as detailed in the 2008 Remodeling Cost vs. Value Report.
On a national level, wood deck additions and all types of siding replacements-upscale fiber cement, midrange vinyl, and upscale foam-backed vinyl-returned more than 80 percent of project costs upon resale. Of these, the most profitable project was upscale fiber cement siding, which recouped 86.7 percent of costs, followed by wood decks at 81.8 percent, midrange vinyl siding at 80.7 percent, and upscale foam-backed vinyl siding at 80.4 percent.
The 2008 Remodeling Cost vs. Value Report compares construction costs with resale values for 30 midrange and upscale remodeling projects comprising additions, remodels and replacements in 79 markets across the country, expanding from 60 markets last year.
Projects With Highest, Lowest Returns
In addition to wood decks and siding, window replacements and kitchen remodels also returned a relatively high percentage of remodeling costs on a national basis.
All types of window replacements-upscale and midrange wood and upscale and midscale vinyl-returned more than 76 percent of costs. A major midrange kitchen remodel returned 76 percent of project costs, while a minor midrange kitchen remodel returned 79.5 percent of costs.
On a national level, bathroom remodels, while still a relatively good investment, do not return as high a percentage as in previous years. A midrange bathroom remodel was estimated to return 74.4 percent on resale, comparable to a midrange attic-to-bedroom conversion, at 73.6 percent of costs recouped, and a midrange basement remodel, at 72.7 percent of costs recouped.
As in last year's report, the least profitable remodeling projects in terms of resale value were home office remodels, sunroom additions, and back-up power generators, returning only 54.4 percent, 56.6 percent, and 57.1 percent, respectively, of project costs.
National Association of Realtors® President Charles McMillan says the resale value of any given remodeling project depends on a variety of factors.
"A home's overall condition, availability and condition of surrounding properties, location, and regional economic climate are all factors that will influence the value of any remodeling project," he says.
1,700 realtors from around the state recently gathered in Austin for the annual "Realty Round Up" tradeshow and almost everyone had positive things to say about the current housing market. Hosted by the Austin Board of Realtors, an estimated 800 attendees filling the ballroom of the Austin Convention Center.
The event included a speech by the renowned real estate expert, Dr. Mark Dotzour, who responded to real estate predictions that housing prices will depreciate in the upcoming year. Experts forecast the median home price would decline between 5 and 10 percent, but the chief economist for the Texas A&M Real Estate Center not only rebuked the prediction, he boldly stated that now is, in fact, a great time to buy. Dotzour argued that the recession is already halfway through, and he expects it to end by summer 2009. He contends that the high proportion of individual debt compared to disposable income caused the crisis. In recent months, 14% of disposable income for individuals has been used on debt, compared to the average rate of 10%. Dotzour's outlook for 2009 shows that percentage going down. By the end of Q1, he shows a decrease in the unemployment rate and an increase in people moving into the area-projecting that 13 million people will to move into Central Texas by 2030.
Dotzour not only gave a positive outlook to the future, but he also addressed the current housing market. He disagrees with predictions of the Central Texas housing bubble, arguing that prices will not go down. He states that with the current low rates and the added benefits provided by home builders and sellers in Austin, now is a best time to buy in the area.
Austin has been insulated from the drastic downturn in the home market, thanks to all the new jobs available. Forbes has ranked Austin third among the best cities for jobs in 2008, ranked number one for income growth, and number two for employment growth. Home values won't be depreciating in this area, Dotzour argues. In fact the market is currently experiencing a three-and-a-half percent rate of appreciation. Additionally, the Austin real estate market currently holds about six-and-a-half months worth of housing inventory, and many builders are sacrificing their margins and providing extra incentives to drive sales.
Here's the link to his presentation: http://www.buffingtonsignaturehomes.com/pdfs/10-22-08-Austin-Realty-Roundup.pdf
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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